McTavish Ltd. completed its fi rst year of operations on September 30, 2021. McTavish reported the following information at September 30, 2021:

Instructions

Assuming that McTavish reports under ASPE, prepare the operating section of a cash fl ow statement using the direct method.

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MCTAVISH LTD. Selected balance sheet account balances at September 30, 2021 Accounts receivable $23,000 Prepaid expenses Accrued expenses payable Interest payable Dividends payable Income taxes payable 3,100 10,500 500 3,800 9,800 MCTAVISH LTD. Income Statement Year Ended September 30, 2021 Service revenue $285,000 $122,000 Operating expenses Depreciation expense Gain on sale of equipment 12,300 (5,750) 128,550 Profit from operations Interest expense 156,450 4,000 Profit before income tax 152,450 Income tax expense 38,500 Profit $113,950